Humanitarian Relief Distribution Game Sinan Salman Ph D

Humanitarian Relief Distribution Game Sinan Salman, Ph. D Suzan Alaswad, Ph. D Zayed University UNHCR: 65. 6 million forcibly displaced people in the world in 2018. Photo: AFP Debrief

Player Experience • How did you feel? • Calm, Collected, In Control? • Or did you feel a little overwhelmed, frustrated and controlled by forces in the system? • Did you find yourself "blaming" the players next to you for your problems? • How was the supply chain performance? 2

Performance • Team performance is always poor • 30%-60% fulfillment rate • Average costs are about $500 K-$6 M (for 45 weeks) • Best possible performance • 95+% fulfillment rate • 10 folds improvement in cost! • Similar patterns always occur… even though very different people play 3

Was Volatile Customer Demand the Problem?

Management Focus • Which of the performance metrics did you focus on? • Fulfillment rate • Cost • Environmental impact

Typical Results Orders

Typical Results Inventory/Backorders

Typical Results

Other Groups

What would happen in the real world with this kind of performance? • A typical organizational response would be to find the "person responsible" (usually the guy/gal placing the orders or the inventory manager) and blame him/her • But the game clearly demonstrates how inappropriate this response is 10

Some questions for discussion • What, if anything, is unrealistic about this game? • Why are there order/production/shipping delays? 11

Bullwhip effect problems • • High inventory levels Low service level (backorders) High cost High demand fluctuation causes more problems… 12

Bullwhip effect problems • Variation in demand along the supply chain requires… Shipment capacity Production capacity Inventory capacity to cope with peaks. • Most of the time this capacity will be idle. • There’s significant cost and investments attached! • In the end: high overall cost in the supply chain 13

Report • Factors contributing to supply chain performance • • • Lack of information flow • • Triple bottom line objective Lack of demand forecasting Long lead time Ordering policies: Batching and Shortage Gaming Price fluctuation (e. g. promotions, discounts, and sales), does it impact bullwhip? If so how? Supply chain design (could direct to customer instead of the utilized distribution channels help? ) • If you only can change one thing in the simulation to significantly improve performance, what would you do? 14

Debrief End 15